To many investors last year, it must have seemed like an amazing opportunity -- giving financier Craig Berkman thousands in cash in exchange for early dibs at Facebook's highly coveted pre-IPO shares.

Berkman, 71, seemed trustworthy. He was a former gubernatorial candidate for Oregon, the state's Republican chairman between 1989 and 1993, and an ex-investment banker.

Little did they know that Berkman was said to have pocketed that money -- totaling $8 million -- and then allegedly used it to pay off debts and fund personal expenses.

Berkman was arrested in Florida today for allegedly defrauding investors in this Facebook IPO "Ponzi-like" scheme, according to Reuters. He also supposedly told these investors that he had access to other tech company shares, including LinkedIn, Groupon, and Zynga. The financier allegedly didn't have access to any of these shares.

The U.S. Securities and Exchange Commission launched an investigation into Berkman's alleged payment scheme last summer. It has since filed a civil case against the financier, according to Reuters.

"Berkman blatantly capitalized on the market fervor preceding highly anticipated IPOs of Facebook and other social media companies to fleece investors whose cash flow he treated like an ATM to fund his own living expenses and pay court-ordered claims to victims of his past misdeeds," director of the SEC's New York office Andrew Calamari told Reuters.

Berkman allegedly operated under an entity called Ventures Trust II, where he was said to be a manager. Reuters reports that one allegation filed against Berkman said that more than 50 investors sent $4.6 million to Ventures Trust II for investment.

U.S. Attorney Preet Bharara in Manhattan has also filed criminal charges against Berkman, according to Reuters. He is charging the financier with two counts of securities fraud and two counts of wire fraud, each of these counts carry up to 20 years in prison.

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Dara Kerr is a staff writer for CNET focused on the sharing economy and tech culture. She grew up in Colorado where she developed an affinity for collecting fool's gold and spirit animals.
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